Shield v Shield

Permission to appeal should be refused where the first-instance judge has resolved the decisive factual issue against the applicant, the proposed grounds do not properly challenge that finding, and the appeal has no real prospect of success. An appellant cannot use an amendment at the permission stage to introduce a materially new factual case requiring fresh investigation and likely to cause unfair surprise. A mere revocable intention to leave property by will does not establish a sufficiently firm commitment for a common intention constructive trust or proprietary estoppel where the owner remains free to deal with the property. The court also indicated that a testamentary promise may not create an immediate trust and that estoppel ordinarily requires the promise to have been broken.

Christopher Shield intervened in Susan Shield’s application for financial relief against Richard Shield following their divorce. He claimed that Richard’s shares in R.A. Shield Holdings Limited were held for him, alternatively that Richard was estopped from disposing of them otherwise than by will.

After an eight-day trial, Mr Nicholas Francis QC, sitting as a deputy High Court judge, found that no binding commitment had been made and that the beneficial ownership of the shares remained with Richard. Christopher sought permission to appeal. At the hearing, he also sought to amend his grounds to allege a different commitment made in 2003. The central issues were whether the proposed amendment raised a new factual case and whether the existing equitable arguments had any real prospect of success.

Disposition

The Court of Appeal unanimously refused permission to amend the grounds and refused permission to appeal.

1. Decisive factual findings. Rimer LJ held that the deputy judge had found, as a matter of fact, that Richard and Christopher had made no mutual commitment that Christopher could rely on in relation to a testamentary gift of the shares. Richard’s intention to make the gift remained revocable. He was free to sell, charge or otherwise deal with the shares during his lifetime. Those findings were fatal to the claims based on a common intention constructive trust and proprietary estoppel. They were not challenged by the original grounds, and an appeal against them had no real prospect of success.
2. Attempted amendment. The proposed amendment alleged a commitment made in 2003, whereas the case advanced below was that the relevant arrangement arose in 2005. It therefore sought to introduce a materially new factual case and would require a fresh investigation of matters not considered by the trial judge. The amendment was sought too late and would unfairly surprise the respondent. There was no justification for allowing it.
3. Meaning of “binding” agreement. Rimer LJ rejected the suggestion that the deputy judge’s references to the absence of a binding agreement dealt only with the absence of an enforceable contract. Read in context, the findings meant that there was no mutual commitment on which Christopher was entitled to rely and no unconscionability in Richard departing from his intention.
4. Additional reasoning. Patten LJ added that, even if an agreement to leave the shares by will had existed, it did not obviously create an immediate binding trust because its terms were inconsistent with an immediate equitable interest. He further considered that an estoppel required proof that the promise had not been kept; while Richard remained alive, a promise to make a testamentary disposition had not yet been broken. Kitchin LJ agreed with both judgments.

• Court of Appeal (Civil Division): refused Christopher Shield’s application to amend his grounds and refused permission to appeal.
• High Court Family Division: after an eight-day trial, Mr Nicholas Francis QC, sitting as a deputy High Court judge, found that Christopher had no interest in Richard’s shares in R.A. Shield Holdings Limited.